BlackRock Reaps $4.1 Billion Tax Benefit from Bitcoin Appreciation
BlackRock has recorded a substantial income tax benefit of $4.1 billion after the fair value of its Bitcoin holdings surpassed their historical cost basis. This adjustment, disclosed in an October 5 filing, stems from an accounting-level change to deferred tax assets rather than trading profits. As of October 4, BlackRock held 848,000 Bitcoin with an average cost of $75,440.70 per coin, while the net asset value of its IBIT fund approached $69 billion.
Despite a broader trend of net outflows from U.S. spot Bitcoin ETFs, BlackRock's IBIT fund experienced inflows on October 5. This divergence highlights varying investor preferences and fund-specific strategies. Additionally, Japanese Bitcoin treasury company Metaplanet conducted a liquidity test by selling 10,000 Bitcoin and repurchasing 11,000 Bitcoin, increasing its total holdings to 44,000 Bitcoin valued at approximately $3.8 billion.
The tax benefit arises from the reversal of deferred tax assets as Bitcoin's fair value exceeded its cost basis. BlackRock's holdings have grown significantly since June, with fair value appreciation contributing to the accounting adjustment. Metaplanet's transactions also generated a potential $97 million deferred tax asset, demonstrating strategic liquidity management.
Market data provider Farside Investors noted the contrasting fund flows, while Maketo estimated the average cost of Bitcoin in the IBIT fund at $81,188 per coin as of October 2. These insights reflect the complex interplay of cost calculations and transaction mechanics within Bitcoin ETFs.